U.S. Workers Struggle in Worst Job Slump Since Great Depression

August 27—Jobless and underemployed workers are suffering the worst job slump since the Great Depression, according to Labor Market Left Behind, an Economic
Policy Institute report released August 27. With a net 3.2 million private-sector jobs lost in the United States since President George W. Bush took office, the current recovery has been the worst for job growth on record since the Bureau of Labor Statistics (BLS) began tracking unemployment in 1939, the report finds.

"This Labor Day finds more working Americans just treading water, trying to keep their heads above water and waiting for the lift raft they've been told is on the way," says EPI President Larry Mishel. "The administration's promised jobs and growth has not arrived and doesn't seem to be anywhere on the horizon."

The report concludes the economy is expanding too slowly to quickly lower unemployment—reaching 6.2 percent in July, according to the latest available BLS numbers. And jobseekers aren’t the only ones hurt by the weak labor market, the report says, with wages growing slowly for most workers and even falling in real terms for some.

“For too many working families, the current recovery is indistinguishable from the recession,” says Economic Policy Institute Senior Economist Jared Bernstein, who co-authored the report with Mishel. According to Bernstein, recent signals suggest growth will improve in the second half of the year, but even optimistic forecasts for unemployment hover around 6 percent: “We are looking at little if any improvement in unemployment for at least the rest of the year.”

Among the report’s main findings:

Even if predictions of stronger growth in the second half of 2003 prove accurate, unemployment will stay near 6 percent through most of 2004.

Employment opportunities have declined more for college graduates than for those without a high school degree.

Since the recovery began, the overall unemployment rate has gone up 0.6 percent. The increase for African Americans has been 1.3 percent.

Real wages of typical (median-wage) workers, which grew about 2 percent more than inflation through 2001, stopped growing entirely in 2002.

This is only the second recovery since World War II in which unemployment has not yet started to fall 29 months into a recovery.

The portion of underemployed workers—those working fewer hours than they want or in jobs for which they are overqualified—reached 10.2 percent in July 2003.